Copper Constructive on Encouraging News around China’s Property Market
Copper Analysis
Beijing has been trying to revitalize the beleaguered real estate market and the central bank along with other regulators singaled further support on Friday, urging financial institutions to facilitate reasonable funding needs of property developers [1]. According to Bloomberg, authorities have started drafting a list of 50 real estate firms that would be eligible for financing [2]. Furthermore, embattled developer Sunac said that it has met its restructuring conditions [3], helping broader sentiment and sending its stock around 15% higher today.
Copper prices are lifted by this round of good news, since the commodity is widely used on building construction and China is its top consumer. After a profitable week, it extends the recovery from last month's 2023 lows, trying to move into profitable territory for the year. The advance brings 4.026 in the spotlight, but tackling it would likely need strong catalyst and we are cautious around its ascending prospects.
Despite some supportive measures however, China's property sector remains in distress, while the overall post-pandemic recovery has faltered, even though there are signs of stabilization. Furthermore, the Relative Strength Index points to overbought conditions, which can stop the rebound and send Copper back to the EMA200 (at around 3.675). Daily closes below it would make it again vulnerable to this year's lows (3.517), although these have a higher degree of difficulty at this stage.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 21 Nov 2023 http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5138967/index.html | |
| Retrieved 21 Nov 2023 https://www.bloomberg.com/news/articles/2023-11-20/china-drafts-list-of-50-real-estate-firms-eligible-for-funding | |
| Retrieved 03 May 2024 https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1120/2023112001031.pdf |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.